It is said that a country’s currency peg can become currency manipulation representing protracted government intervention in the foreign exchange market that gives it unfair competitive advantage in international trade yet prevents effective balance of payments in its trade partners. Regarding...

Resumen El presente estudio se centra en analizar los factores que provocan el éxodo de capital en México, entre los que se incluyen: el saldo en cuenta corriente, el grado de sobrevaluación de la moneda, el diferencial en las tasas de interés entre México y Estados Unidos y el diferencial...

The paper addresses the question, whether the increasing current account deficit has negative impact on American economy and society. Using data for American economy in years 1967 – 2005, it will be shown that perceived welfare effects, as measured by changes in Consumer Confidence,...

The paper explores the impacts of heterogeneity in degree of relative risk aversion on the balance on current account in a two-country endogenous growth model. It concludes that, like the heterogeneity of demographic changes, the heterogeneity in degree of relative risk aversion generates...

The paper addresses the question, whether the increasing current account deficit has negative impact on American economy and society. Using data for American economy in years 1967 – 2005, it will be shown that perceived welfare effects, as measured by changes in Consumer Confidence,...

This article provides a defense of a sentence lifted from the Final Report of the United States Trade Deficit Review Commission. 'The savings shortfall argument falsely presumes that causation goes from savings to the trade deficit'. The savings shortfall argument is support by nothing more than...

This paper studies the impact of transitory income shocks (fluctuations in output, for example) on the current account in a two-country world. According to the standard intertemporal approach (or “the traditional rule”) to the current account, the variation in the current account is equal to...

THE THRUST OF THIS PAPER HAS BEEN TO INVESTIGATE THE THEORETICAL PROPOSITION OF THE MONETARY APPROACH TO THE THEORY OF BALANCE OF PAYMENTS ADJUSTMENT MECHANISM. THE ESSENCE OF THE APPROACH IS A CONSISTENT INSISTENCE THAT BALANCE OF PAYMENTS IS A MONETARY AND NOT A REAL PHENOMENON AS POSITED BY...

The object of this paper is to develop an Early Warning System of Macro Vulnerability for several Latin American countries based on previous work of Kaminsky, Lizondo and Reinhart (1997) and Kaminsky (1998). We build a composite leading indicator that signals macroeconomic vulnerability, showing...

This paper assesses empirically whether global risk aversion (GRA) and some if its determinants (US economic growth and the US long term interest rates) explain developments in Latin American sovereign spreads. We find that GRA is significant and positively related to Latin American sovereign...